Taking on analysts’ expectations and winning: Gilead Sciences Inc. (GILD)

Gilead Sciences Inc. (NASDAQ: GILD) stock jumped 0.43% on Friday to $63.77 against a previous-day closing price of $63.50. With 6.09 million shares changed hands, the volume of the stock remained lighter than its average volume of 6.77 million shares. During the session, the Drug Manufacturers – General company that operates in wider Healthcare sector, reached to the highest price of $64.32 whereas the lowest price it dropped to was $62.93. The 52-week range on GILD shows that it touched its highest point at $74.12 and its lowest point at $57.17 during that stretch. It currently has a 1-year price target of $70.78. With its current market cap of 79.20 billion, GILD has annualized dividend of $2.92 while the current yield stands at 4.58%. Beta for the stock currently stands at 0.33.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of GILD was down-trending over the past week, with a drop of -1.89%, but this was up by 0.14% over a month. Three-month performance surged to 1.90% while six-month performance rose 8.36%. The stock lost -10.66% in the past year, while it has lost -12.17% so far this year. A look at the trailing 12-month EPS for GILD yields 3.28 with Next year EPS estimates of 6.47. For the next quarter, that number is 1.55. This implies an EPS growth rate of -8.70% for this year and -2.57% for next year. EPS is expected to decline by -1.23% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -13.10%.

Float and Shares Shorts:

At present, 1.26 billion GILD shares are outstanding with a float of 1.25 billion shares on hand for trading. On Jul 14, 2022, short shares totaled 16.56 million, which was 1.32% higher than short shares on Jun 14, 2022. In addition to Mr. Daniel P. O’Day as the firm’s Chairman & CEO, Mr. Andrew D. Dickinson serves as its Exec. VP & CFO.

Institutional Ownership:

Through their ownership of 82.19% of GILD’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 49.27% of GILD, in contrast to 32.83% held by mutual funds. Shares owned by individuals account for 1.30%. As the largest shareholder in GILD with 8.39% of the stake, The Vanguard Group, Inc. holds 105,112,593 shares worth 105,112,593. A second-largest stockholder of GILD, BlackRock Fund Advisors, holds 83,536,656 shares, controlling over 6.67% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in GILD, holding 57,946,936 shares or 4.62% stake. With a 2.96% stake in GILD, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 37,138,079 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.23% of GILD stock, is the second-largest Mutual Fund holder. It holds 27,992,743 shares valued at 1.78 billion. American Funds Income Fund of Ame holds 2.12% of the stake in GILD, owning 26,509,312 shares worth 1.68 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for GILD since 29 analysts follow the stock currently. There are 8 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 19 believe that the stock is worth HOLDING, 1 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With GILD analysts setting a high price target of $90.00 and a low target of $56.00, the average target price over the next 12 months is $70.60. Based on these targets, GILD could surge 41.13% to reach the target high and fall by -12.18% to reach the target low. Reaching the average price target will result in a growth of 10.71% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. GILD will report FY 2022 earnings on 02/07/2023. Analysts have provided yearly estimates in a range of $6.85 being high and $6.22 being low. For GILD, this leads to a yearly average estimate of $6.62. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Gilead Sciences Inc. surprised analysts by $0.06 when it reported $1.58 EPS against a consensus estimate of $1.52. The surprise factor in the prior quarter was $0.32. Based on analyst estimates, the high estimate for the next quarter is $1.79 and the low estimate is $1.16. The average estimate for the next quarter is thus $1.55.

Dividends & Yield:

In terms of dividends, GILD has a current ratio of $2.92, which is $2.92 over the trailing 12-months, while a dividend of $2.51 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and GILD currently yields $4.55. In the past year, GILD’s dividend yield has been $4.55, but when looking at the stock over the past five years, its yield has been $3.72. Accordingly, GILD has a current buyback yield of $0.57. This was $0.57 for the TTM, and it was $1.69 for the past five years.

Summary of Insider Activity:

Insiders traded GILD stock several times over the past three months with 2 Buys and 2 Sells. In these transactions, 9,984 shares were bought while 4,272 shares were sold. The number of buy transactions has increased to 58 while that of sell transactions has risen to 29 over the past year. The total number of shares bought during that period was 448,858 while 126,053 shares were sold.

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